How Did Events Affect Bitcoin and Which Future Events Could Move the Markets?
Geopolitical and other events tend to affect the world of currency trading and also safe-haven assets such as gold, Bitcoin and cryptocurrencies. As such we've compiled a list of events that are unfolding and will occur in 2020 that could influence the markets.
Wuhan Coronavirus & China Blockade
Currently, China is facing the worst epidemic it has seen in decades. The Wuhan Coronavirus started making headlines roughly a week ago and seems to be spreading rapidly. Nearly 8000 people have been reported as infected with the virus and 170 deaths have been registered. Unofficial reports circulating online anticipate that the number of infected individuals is much higher. Most cases have been in mainland China, but isolated cases reached pretty much every continent across the globe.
Forbes has previously speculated that Wuhan Coronavirus has been possibly pushing Bitcoin's price upwards. China plays a pivotal role in the world of cryptocurrencies as both the world's largest mining hub and trader of cryptocurrencies. As this is a developing crisis, it is unclear how it could possibly affect the world of Bitcoin.
U.S & Iran Tensions
2020 started as a complete mess in a geopolitical sense. The year began with flaring tensions between the United States and Iran. An attack on the U.S. embassy in Bagdad on the 3rd of January was followed by the killing of Iran's top general by U.S. drones. The harsh words between U.S. & Iranian officials pushed many to believe that a potential war is on the horizon. This seemingly reached its peak around the 7-8th of January.
During that period Bitcoin's trading volume has climbed from $22,337,246,045 to $31,415,751,345, a near 30% increase. Along with the rise in trading volume, Bitcoin's price also rose from $7676 to $8378.
As the threat of war slowly dissipated, Bitcoin's price suffered a pullback.
One of the most anticipated events in the world of cryptocurrencies is Bitcoin's halving. This will cut the miner rewards for mining blocks by half.
Currently miners receive 12.5 BTC for each block mined. After the halving, miners will receive 6.25 BTC. This increased scarcity of Bitcoin will likely lead to a sharp price rally as seen in previous halvings. The 2017 bull-run occurred several months after 2016's halving and may have played a big factor.
The U.K. is due to formally leave the European Union this Sunday, the 1st of February 2020. Following its official exit an 11-month transition period will begin. Uncertainty and possibly political instability during this period could weaken the British pound further. This could lead many within the British public to invest in safe-haven assets, such as gold & Bitcoin.
Donald Trump's Mideast Peace Plan
A few days ago, President Trump unveiled his peace plan for Israel and Palestine. The plans outline borders for the two nations and will split the capital, Jerusalem, between both nations. Large Jewish settlements in the West Bank will remain under Israeli control. Seeing that every peace plan and/or partition to date fell apart, Trump's plan might follow the same path.
Should the peace plan fall apart, there is a chance of an Antifada or Palestinian uprising which is associated with terrorism. In previous attempts to broker a peace deal, such as the Oslo agreement in the '90s and the 2000's Camp David Summit, an Antifada that lasted for years followed. Political instability leads to a weakening on national currencies which causes some to seek out safe-haven assets such as gold & Bitcoin.
U.S. Presidential Elections
The U.S. Presidential elections are warming up and the elections will take place in November. Most poll makers and political analysts seem to favor Trump at this point. This is due to the fact that no Democratic candidate has risen to prominence quite yet.
Should Trump win the elections, we will likely see a status quo and no major movements in the markets. If a Democratic candidate manages to snag the elections, we could hypothetically see a decline in the markets. This would be due to uncertainty and changes in U.S. government fiscal policies. A decline in the stock markets could hypothetically be a boon to Bitcoin and cryptocurrencies.
2020 Crypto Summary
It seems that 2020 is going to be a big year for Bitcoin and cryptocurrencies. It seems that the market will have a need for safe-haven assets and Bitcoin and cryptocurrencies could fill that need.
It is likely that Bitcoin could grow massively in 2020. Should this happen other cryptocurrencies are likely to rally as well.
Bitcoin Cash (BCH) also has a halving occurring roughly a month before Bitcoin. This along with the newly added features such as Cash Fusion could be a very positive development for Bitcoin Cash. BCH has already reached #4 in market capitalization, should positive developments continue, it could possibly nudge XRP from the coveted third spot.
Ethereum (ETH) is anticipated to launch Ethereum 2.0 sometime this year as well. Should this go as planned, it could push Ethereum's price upwards greatly. Ethereum 2.0 includes multiple changes and upgrades such as sharding and a switch to Proof-of-Stake.
Some cryptocurrencies could even outperform Bitcoin percentage-wise in gains.
Written by Jonathan Ganor
Writer & cryptocurrency aficionado